Press
Release
Press
Release
MARION, IL, October 4, 1999/PRNewswire/ - In a class action lawsuit
pitting 4.7 million auto insurance policyholders across the U.S.
against the nation's largest insurer, State Farm Mutual Automobile
Insurance Company, an Illinois jury today found that State Farm
failed to perform its obligations under its contract with insured
motorists and awarded the plaintiffs approximately $456 million
in compensatory damages. Punitive damages will be determined
separately, and would be in addition to this amount.
The Avery v. State Farm Plaintiffs showed that State Farm
violated the terms of its policies and breached its contract with
its policyholders by using non-OEM or imitation Aftermarket crash
parts to repair their insured's vehicles, instead of restoring
vehicles to their original "pre-loss condition" as promised
in the company's insurance policies.
"The verdict sends a clear message to State Farm: 'Honor
your policies and don't cheat your policyholders,' " said
attorney Elizabeth Cabraser of Lieff, Cabraser, Heimann &
Bernstein, one of the counsel for the Plaintiff Class. "The
verdict is one of the largest consumer class action and policyholder
verdicts in history," added Cabraser.
The Jury awarded $243.7 million in "Specification/Direct"
compensatory damages (based on the difference between OEM and
Non-OEM parts), and another $212.4 million for "Installation"
damages (based on the associated costs to have the cheaper parts
removed and replaced).
Following an extensive national notice campaign to inform policyholders
of their rights and the pending litigation, the case proceeded
to trial which began on August 10, 1999, and was presided over
by the Honorable John Speroni.
Class members who wish to remain members of the class, need not
do anything at this time. Class members will be bound by all orders
and judgments of the court. Class members' claims will be terminated
by the judgment in this case.
The Avery trial team of attorneys included Don Barrett, of the
Barrett Law Offices of Lexington, Mississippi, Tom Thrash of Little
Rock, Arkansas, Patricia Littleton of Marion, Illinois, Elizabeth
Cabraser of Lieff, Cabraser, Heimann & Bernstein, of San Francisco,
California, and Michael Hyman of Much Shelist Freed Denenberg
Ament & Rubenstein, of Chicago, Illinois.
During the course of the 8 week trial, the jury considered evidence
of the quality of imitation parts and whether they are equal to
genuine parts.
If the class action verdict - the largest in Illinois history
- is upheld on appeal, consumers would be notified and allowed
to participate in the awards through a claims process that will
be determined separately by the Court.
The Plaintiffs also alleged consumer fraud and deceptive business
practices violations and sought an injunction against State Farm.
As a matter of law, the Court will rule upon these claims, which
seek a stop to State Farm's imitation parts practices, separately.
The affected Class members are U.S. residents (except people residing
in Arkansas and Tennessee) who were insured by a vehicle casualty
insurance policy issued by State Farm and who made a claim for
vehicle repairs under their policy and had non-factory-authorized
and/or Non-OEM (Original Equipment Manufacturer) "crash parts"
installed on their vehicles or received monetary compensation
determined in relation to the cost of such parts. "Crash
parts" are vehicle components typically repaired or replaced
as a result of crash damage rather than as a result of normal
vehicle usage. Excluded from the Class are employees of State
Farm, its officers, its directors, its subsidiaries, or its affiliates
and persons who resided or garaged their vehicles in Illinois,
and whose Illinois insurance policies were issued/executed prior
to April 16, 1994, and persons who resided in California and whose
policies were issued/executed prior to September 26, 1996.
The class period starts on July 28, 1987 and ends on February
23, 1998 for this case. The Avery team will follow-up to attempt
to obtain damages for more recent policy holders affected by this
practice.
Court Ordered Notice Answers to Questions Class Action Complaint
Class Certification Order Provide Your Name and Address